----- Original Message ----- From: "Andy Mensah" <[log in to unmask]> To: <[log in to unmask]> Sent: Monday, January 26, 2004 12:14 PM Subject: [unioNews] WTO proposals seen as new burden Jan 26 2004 07:28:20:000AM Business Day 1st Edition <H3>WTO proposals seen as new burden</H3> Quintis Makgati <B><i>MOST of today's wealthiest nations have long used a variety of policies and regulations to shelter their growing domestic industries from ownership, control or undue competition from foreign-owned business interests.</i></B> Today, those same countries are calling for the World Trade Organisation (WTO) to ban such measures a ban which, if enacted, would deny developing countries the right to use the same measures to protect and nurture their newly forming companies. At times, the US has given tax breaks to local industry, forbidden foreign control of banking, restricted foreign ownership of land and allocated mining rights to US citizens only. Japan has restricted foreign ownership in key manufacturing sectors. The UK, France and Germany have all sought to control foreign participation in their economies at one time or another. Large northern-based corporations, which under the new rules would benefit from open access to international markets, are staunch supporters of change. However, the new proposals face strong opposition from developing countries. The result has been a stand-off in the WTO. Disagreements on the four issues trade and investment, trade and competition policy, transparency in government procurement, and trade facilitation contributed to the collapse of last year's WTO meeting in Cancun, Mexico. The four issues, pushed mainly by the European Union (EU) and Japan, were first proposed during a WTO ministerial conference in Singapore in 1996. Developing nations have still not agreed to negotiate them. They do not feel able to assume any further obligations they would face if the proposals were adopted, and are concerned about how the steps would affect their development. Of far higher priority, they say, is to resolve remaining issues of the Uruguay negotiations, which ended in 1994. Two of the proposals, which deal with investment and competition, would oblige all governments to give foreign investors the same rights as domestic companies. At present, countries can grant preferences to domestic firms by, for example, giving them access to domestic distribution channels while denying foreign firms the same rights. Under the new rules, governments would need to allow overseas companies to compete equally with domestic firms to provide goods and services to the government. This would remove a powerful tool which governments have traditionally used to back growing domestic firms. The EU is also pushing for an agreement that would oblige WTO members to enact, in their domestic competition law, a ban on so-called hardcore cartels. The rules would prevent such cartels from engaging in "unfair" trade practices, such as price-fixing, which many believe are designed to remove competitors from the marketplace. Some, however, challenge the assumption that cartels adversely affect development. Cecilia Oh, of the Third World Network, based in Ghana, points out that some of the most successful Asian nations incorporated the formation of cartels in their industrialisation policies. She says there is no shared definition of a "hardcore" cartel. Advocates argue a single global agreement on investment would be better than the myriad accords that regulate foreign firms. Critics, however, believe the proposals would prevent governments from regulating how foreign companies operate in their countries. In the past, governments have often required those firms to purchase local materials or hire indigenous labour. Critics also point to the dangers of governments signing away their power to control domestic policy. The new proposals could extend some of the provisions of the WTO's 1981 voluntary agreement on government procurement. In that case, all WTO members would be compelled to publicly announce bids for supplies and purchases, to let domestic and foreign com panies vie equally to provide them. Developing countries fear they would have to establish new bureaucratic procedures and enact new legislation. Both would be burdensome and costly. Also, without state intervention, most domestic suppliers would find it impossible to outbid larger multinational companies to provide government services. The proposed trade facilitation agreement could lower customs duties and reduce border delays by simplifying import, export and customs procedures. In some countries, the cost of complying with customs formalities is even higher than duties paid on a product. Many developing nations broadly back the aims of the agreement, but are unable to accept new legal commitments. They say they simply lack the resources to put new procedures in place or to provide the necessary training. Egyptian trade minister Youssef Boutros-Ghali says that though some countries see the benefits of agreements on transparency in government procurement, they "have to be drafted so as to take into account the capacities, constraints and needs of developing countries". <i>UN Africa Recovery (www.africarecovery.org).</i> Copyright © 2004 BDFM Publishers (Pty) Ltd lllll QUOTATION: "All of us may not live to see the higher accomplishments of an African empire, so strong and powerful as to compel the respect of mankind, but we in our lifetime can so work and act as to make the dream a possibility within another generation" -<html><A HREF="http://members.aol.com/GhanaUnion/afrohero.html">Ancestor Marcus Mosiah Garvey <i>(1887 - 1940)</i></A></html> llllllllll * //\\//\\ unioNews Newsgroup //\\//\\ * * http://members.aol.com/GhanaUnion * * We're One People * * Join the Chorus * - African Union Shall Succeed - ===================================== A luta Continua! 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